Electric-car growth in October unlikely to turn the tide for Germany

08 November 2023


Germany saw new-car registration return to growth in October. This followed a small market drop in September, not helped by changes to electric-car purchase incentives.

According to new data published by the Kraftfahrt-Bundesamt (KBA), a total of 218,959 new cars were registered in Germany last month, marking an increase of 4.9% from October 2022. While private registrations increased by 6.7%, businesses and fleets made up the majority of the market last month at 63.9%.

Germany’s October registration results were also the weakest of the big five European markets. France, Spain and Italy, as well as the UK, all posted stronger double-digit growth figures.

From January to October, the entire German new-car market recorded 2,357,025 registrations, equating to a year-on-year growth of 13.5%. However, when compared with the pre-COVID-19 levels of 2019, Germany’s new-car numbers were down 22.1%.

No reverse in trend

After several turbulent months, battery-electric vehicle (BEV) registrations in Germany appeared to reach calmer waters in October. A total of 37,334 new all-electric models took to the country’s roads last month, up 4.3% year on year, capturing a market share of 17.1%.

Business BEV purchase incentives were withdrawn at the beginning of September. This resulted in a large number of all-electric registrations being pulled forward, as companies rushed to take advantage of favourable rates. The powertrain saw registrations increase by 170% in August ahead of the change, which was then followed by a 28.6% slump in September.

‘October brings a temporary autumnal ray of hope in new registrations, but we cannot see a turnaround in the trend in the automotive trade,’ said ZDK vice president, Thomas Peckruhn.

‘The slight increase in battery-electric cars can be attributed to the beginning of the final push for the environmental bonus, which will be reduced from 1 January 2024. However, the willingness to buy has not increased dramatically and customers are still very reluctant,’ he added.

Petrol still leads

Elsewhere in the electric-vehicle (EV) market, plug-in hybrids (PHEVs) continued to sink in popularity. Only 16,361 new PHEVs hit the road last month, resulting in a year-on-year fall of 49%. So, while BEVs made up 17.1% of the new-car market, PHEVs accounted for just 7.5%.

Combined, full and mild hybrids recorded 57,575 registrations in October, up 57.9%, to claim 26.3% of the market. Just 1,089 new cars were powered by liquid petroleum gas (LPG), up by 17.5%, while 65 units were fuelled by natural gas (down 48.4%). This meant the total gas powertrain market share reached 0.5% last month.

Petrol continued to lead the market with 71,646 units registered, up 7.5%, with the powertrain securing a market share of 32.7%. Meanwhile, diesel continued its decent, accounting for 15.9% of new-car registrations with 34,881 new units hitting the roads, down 4.6% on October 2022.

Production under pressure

According to a survey conducted by the ifo Institute, Germany’s automotive climate cooled from September to October. ‘Companies in Germany’s automotive industry rate their current business situation as significantly worse than in the previous month,’ said Anita Wölfl, a specialist at the ifo Centre for Industrial Organisation and New Technologies.

While expectations for the coming months did improve slightly, hopes remained broadly subdued. There was a marginally more confident assessment of the situation regarding vehicle orders, even though there was a slight shrinkage in current work. ‘However, the automotive order backlog is still quite high compared to the long-term average,’ Wölfl added.

Meanwhile, the Association of the Automotive Industry (VDA) found that 85% of suppliers and medium-sized manufacturers it surveyed felt heavily burdened by bureaucracy. Many of these companies said the effort involved in completing non-value-adding reports has increased, taking up time and generating costs.

Energy costs were also a major concern. Over 70% of respondents said they were heavily or very heavily burdened by the high price of electricity, while 59% said they continue to be severely or very severely challenged by the cost of gas.

The VDA’s survey also revealed that investment plans are shifting. More than one in three companies surveyed reported plans to invest outside of Germany. Relocation destinations included other EU countries, Asia, and North America. A further 14% of companies claimed to be looking to cut back on investments, while only 1% stated they wanted to increase funding figures in Germany.

‘Our survey clearly shows that medium-sized automotive companies in Germany suffer immensely from excessive bureaucracy and high energy costs,’ said Hildegard Müller, president of the VDA. ‘The fact that more and more companies are shifting investments abroad is a warning signal for Berlin. It is important to take countermeasures and replace regulatory small-scale with long-term strategies for more competitiveness.’